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Top 12 Film Industry Stories of 2008:
#2: HD-DVD Loses, Why Hasn't Blu Ray Won?

By David Mumpower

January 15, 2009

Half a billion dollars *is* serious.

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Disney has hedged their bet on this philosophy in recent days. Accepting that consumers are gun shy about paying more for a product that is only marginally superior in nature, the corporate giant has announced an intention to include a DVD version in the purchase of the majority of their Blu Ray titles. They have stated that they are "aiming to improve the utility of the high-definition format". Similarly, several recent Blu Ray releases have had a digital copy included in order to allow consumers to increase the portability of their software purchase. It's this aspect that is particularly noteworthy moving forward.

Digital license has been the bogeyman of the movie and music industries over the past ten years. While the Motion Picture Association of America was using Manny the Stuntman to make their customers feel guilty, the ubiquity of the iPod was bringing down the music industry. Back in 2004, I noted this behavior in a Film Industry Story, and I pointed out that the movie studios would be in trouble if the iPod ever started playing movies. That day has come and with the expected domination of the iPhone in coming years, physical media's future is cloudy at best.




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Before you disagree with me on the point, I simply ask you to consider how often you play compact discs these days. For a shocking percentage of people, the answer is that the only time they do is in the car (if they haven't added MP3 functionality there yet) or when they rip a CD to their MP3 player. Otherwise, CDs sit on the shelf and collect dust. With the growing popularity of services such as Amazon Unbox, TiVo direct download, Netflix Watch It Now (also available through the Microsoft 360) and several others, consumers have a lot more flexibility in how they can purchase and watch a movie.

The changing nature of ownership of such movie licenses creates a headache for the very corporations who capitalize on the revenue created by the new medium of download sales. After so much time, energy and (particularly) money was spent on the development of competing next-generation DVD formats, Blu Ray's triumph over HD-DVD may yet ring hollow. One battle is over, but now Blu Ray must show that it is not just a shiny, new version of Laser Disc. In order to do so, it will have to become the primary purchasing option for movie sales, and it will also have to maintain disc sales market share in a new sales environment wherein physical copies are slipping in popularity. Will it accomplish these tasks? That's probably going to be a topic for Top 12 Film Industry Stories of 2009.


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